As you make important decisions that affect your retirement, one key step will be to closely examine your retirement beliefs and assumptions. Doing so can help you avoid making serious mistakes and put you on the right path for making more effective decisions.

People’s beliefs and assumptions about retirement are often based on examples of older friends and relatives who’ve already retired, narratives they’ve heard in the media, well-meaning advice from friends or relatives who aren’t well informed, and urban legends that don’t have much basis in reality. For the sake of this post, let’s call all these sources retirement “stories.”

Of course, not all retirement stories are misleading, and there are positive ways to use these types of stories to your benefit. According to a recent survey of pre-retirees and retirees conducted by the Stanford Center on Longevity, 55% of survey respondents reported that they’d be encouraged to do more retirement planning if they heard stories of people who are like them. These results and other significant influences on retirement planning are discussed in the report Disconnected: Reality vs. Perception in Retirement Planning.

But the key to making good retirement decisions is to examine whether your beliefs and the stories you’ve heard are actually grounded in reality and apply to your circumstances. You’ll also want to reflect on whether these stories and beliefs might influence you to make decisions that could improve your retirement finances—or make them worse.

Let’s look at two common stories about retirement and possible positive courses of action you could take as a result.

1, “Retire as soon as you can—you never know what will happen.”

Often, the people giving this advice justify it by saying something like “None of the men in my family lived beyond age 75” or “My mother died of cancer at age 54.” Indeed, these are compelling stories, and they could justify making initial decisions that might later appear to be short—sighted.

You can start by reflecting on whether these stories apply to your circumstances. For example, if none of the men in your family lived beyond age 75, why is that? Did they smoke? Did they have physically demanding or dangerous jobs? Do their circumstances apply to you?

Regarding someone who died of cancer at a young age, what were their circumstances? Do they apply to you? What about all your other relatives? Did any of them live to a ripe old age?

The fact is, deciding when to retire is one of the most important retirement decisions you’ll make, and you don’t want to make impulsive decisions that you might regret later. Retiring early can result in permanently reduced lifetime retirement income, which could cause hardship when you reach your 80s and beyond.

A smart step to help you decide when it would be best for you to retire is to understand how much retirement income you might receive if you retired early compared to delaying your retirement for a few years. If you discover you’ll need to work longer than you originally planned, you might want to consider working in a manner that’s more compatible with your goals, such as part-time work or work that’s less stressful or more enjoyable.

2. “Start Social Security as early as you can. It’s going bankrupt, and you won’t get anything.”  

Yes, there are funding challenges with Social Security, but it’s not going bankrupt. The worst that could happen if Congress doesn’t do anything to correct the funding challenges is that around 2033, you might get hit by a 20% to 25% reduction of benefits. While that would indeed be bad news, your benefits wouldn’t go to zero. And even if you assume your benefits might be reduced in the future, delaying the start of benefits might still be the strategy that results in the highest amount of benefits you’d receive over your lifetime.

Why delay? For most people, Social Security benefits represent a very large portion of their total retirement income—often more than half of their total monthly retirement checks. So, it makes sense to make these benefits as sizable as possible; this usually requires delaying the start of benefits at least until your full retirement age and often to age 70.

Hopefully by now, you get the picture that not all stories you hear are relative to your own situation and some may even be untrue. Here’s the suggested technique for assessing these stories:

  • Examine your beliefs and assumptions about retirement.
  • Reflect on the source of those beliefs and assumptions. Are the stories you believe valid? Do they apply to your circumstances?
  • If you act on your beliefs, what will the consequences be? Would you later regret these decisions as short-sighted? What are the alternatives?

Of course, influential stories can also be helpful. On the positive side, you may have heard stories of older relatives and friends who made good decisions and are thriving in their later years. Let these examples give you positive inspiration and guidance as you make your critical retirement decisions.